Cash or Debit?

Do you carry around cash for the week or do you use your debit card for all of your purchases? In the past if I had a wallet full of money it would vanish in the blink of an eye and I wouldn’t know what happened to it. I’m no longer that bad with carrying cash but I still find it difficult to use cash for a week’s worth of spending. One of the commenters, Zeromoney, from my last post suggested taking out money for the week and using that for all of your spending. I have tried that in the past with limited success and I thought that I would write this post as a comparison between the two and how I tend to use them.

Cash

As the saying goes cash is king. The nice thing about paying for everything with cash is that there won’t be any fees or hidden costs associated with it. I just can’t see a store clerk saying: “Oh you’re using a $20 bill today, I’m going to have to charge you an extra 50 cents… is that ok?”. The drawback that I find is that it makes tracking all of your spending a little bit more difficult. You have to rely on remembering to ask for a receipt or to take note of each purchase.

Debit
Most stores and restaurants now allow you to pay for your purchases with debit (at least where I live). This is nice since it means you can have a nice empty wallet and access to your bank account. I find I prefer to use debit for my day to day spending because I’ve got a good handle on what money is in my bank account. On top of getting a reciept the bank keeps a record of every time I used the card. Now using debit does carry some drawbacks, first off not everyone accepts debit and if they do there might be an additional charge for the service. Not to mention the bank will charge you fees if you use it a lot. The bank fees are annoying but they typically don’t amount to very much and having the ability to track my spending is nice.

In conclusion I’ve been using a combination of both so far though with my weekly budgeting it might be interesting to try pulling out spending money for the week and seeing if I’m able to stay within that amount. You can never go wrong with having cash in your wallet other than spending it too quickly.

What experiences have you had with Cash vs Debit?

5 thoughts on “Cash or Debit?”

  1. I think the trick for me, is that I don’t carry around credit cards, and empty out my available accounts from my debit, so the money I have is the money I have.. until Friday. When it’ seasily accessible to get more, it’s easier to spend it all.

  2. Good idea – by removing the temptation to overspend you don’t give your self the option.

  3. Cash can have big psychological benefits like giving you a tangible feeling of how much a $200 grocery bill is. There is something called the credit card premium which tends to reveal that people are willing to spend much more with plastic than with cash.

    I do agree tracking is a bear with cash and to make it really work you need something like the envelope system.

    With that said I like the convenience of the plastic and failed miserably at trying cash. I think I need to give the envelope system a whirl to see what difference it really makes.

  4. Well, I hated on debit cards on principle, but recently discovered that I was still right not to use them.

    As for cash? Igh…. no good for me either. I have developed a natural aversion to it because it’s far far too easily spent and difficult to track. To be honest, I’ve never tried to go all-cash, and tracked it, but it’s because I love my cc rewards, and already consider just about every single purchase very carefully in the context of what I’ve already spent that month.

    On the other hand, I can, out of sheer stubbornness, resist spending cash in my wallet, but that doesn’t really help if I need to buy groceries, etc.

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